Shredded: The pimp and the whorehouse of debt | Ian Fraser:
It has been nearly two years in the making, but Shredded: Inside RBS The Bank That Broke Britain was published by Birlinn today. It’s a look at the Icarus like ascent of RBS under former chartered accountant Fred “The Shred” Goodwin, and examines many aspects of the bank’s spectacular rise and fall which have never before come under the microscope.
June 5th, 2014
It has been nearly two years in the making, but Shredded: Inside RBS The Bank That Broke Britain was published by Birlinn today. It’s a look at the Icarus like ascent of RBS under former chartered accountant Fred “The Shred” Goodwin, and examines many aspects of the bank’s spectacular rise and fall which have never before come under the microscope.
Unlike some earlier books about the RBS catastrophe, it contains a forensic analysis of the reasons for the bank’s failure, how former chief executive Fred Goodwin successfully blunted regulation by getting No 10 Downing Street to intervene on his behalf, and an array of new anecdotes illustrating Goodwin’s despotic leadership style.
The book also lifts the lid on the astonishing failure of the UK government (as well as the UK’s regulatory and prosecutorial authorities, and the bank’s supremely complacent non-executive directors) to do anything change the bank’s rotten culture since handing it a £45.5bn bailout in October 2008.
Everybody I spoke to at the bank insists that the bank’s corporate culture deteriorated markedly under Stephen Hester, CEO from October 2008 to September 2013, and that things have got even worse since Kiwi Ross McEwan took the reins in October last year.
Among other things, I reveal that the government’s decision to introduce a top tier of superannuated City investment bankers both at UK Financial Investments and at the top of the bank was unlikely ever to bring the changes that the bank—which also owns NatWest, Coutts, Ulster Bank, Citizens Financial, Adam & Company and a range of other financial brands—so desperately required.
The epitome of the cultural and ethical failures at the bank include the fact its investment banking arm, now due to be largely shut down, was only able to thrive by cheating and that it continued to rig various benchmarks, swindling investors and counterparties, for many years after the bailout. Then there is the bank’s mendacious approach to litigation and of course the ongoing mega-scandal of the “financial terrorism” inclicted on scores of thousands of business customers by RBS, NatWest and Ulster Bank’s global restructuring group, know internally as the “grim reaper group“.
As you may know, GRG has a track record of kneecapping viable business customers to which the bank has for some reason taken a dislike—or to whose assets it has taken “a shine”—before killing them off in a variety of ways in order to enable the bank to effectively make off with their assets.
However this is not a book about the catastrophic failure(s) of one bank, or the reasons for these failure(s). It is really a book about what went wrong with banking and the financial system from the mid 1980s 0nwards. It details the catalogue of political, regulatory and ideological failures—including blind faith in free markets, blindness to risk, wilful blindness to rampant financial fraud and the love of debt—that culminated in the collapses of October 2008. I also say that the post-crisis attempts at sorting things out have been so inadequate that another collapse is almost inevitable.
There has been a fair amount of media coverage of the book in the build-up to the launch, including this excellent article by Tom Harper and Nick Kochan in last Sunday’sIndependent on Sunday. The piece, which describes Shredded as “an explosive new book” was the most read and most shared article on the entire Independent website on Sunday and most of Monday.
RBS could fail due to ‘£100bn black hole’ – with British taxpayers in line to lose their entire £45bn stake
There has also been some coverage in the Mail on Sunday, MailOnline, ITV News, The Herald, Daily Record and elsewhere, with significant further coverage planned for this weekend. There has also been an article in ValueWalk in the US, and last but not least my appearance on the Keiser Report, recorded on Monday, 2nd June. My 12-minute interview with Max starts at 12 minutes 30 seconds. Max comes out with some superb lines including that Fred Goodwin was a “pimp” strutting his stuff as he lured randy males into RBS’s “whorehouse of debt”.
The book can be ordered from Amazon.co.uk, Birlinn and numerous other websites. It can also be purchased in most leading bookshops from today. An e-book will be available in a few weeks.
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